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TransDigm Taps Evercore for Armtec Defense Carve-Out

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TransDigm Group is preparing to launch an auction process for Armtec Defense Products, its ammunition component and countermeasure producer asset, according to sources.

The company has retained Evercore as its sell-side advisor for the carve-out, the sources said. Armtec became part of TransDigm when the prime contractor bought Esterline Technologies for approximately $4 billion in cash in 2019.

Armtec’s financials are unclear, though one source said specialized parts makers can potentially be valued at high-teens EBITDA multiples. The company designs and manufactures various types of ammunition and countermeasure products, such as infrared flares, according to its website.

Last November, TransDigm reported that it had generated approximately $4.56 billion in EBITDA for its fiscal year ended Sept. 30, up 19.8% from 2024. The company has about $30 billion in total debt and 6.4x gross leverage. It had a market cap of $70.69 billion as of press time.

In 2021, TransDigm divested ScioTeq and Treality Simulation Visual Systems to OpenGate Capital, a financial sponsor in New York City, in a deal valued at about $200 million.

The sale of Armtec would potentially follow an initial public offering for Arcline-backed Arxis, which is one of TransDigm’s peers in the aerospace components sector. Arxis has retained Goldman Sachs, Morgan Stanley and Jefferies as bookrunners on the offering, which could result in a multibillion-dollar valuation, Octus reported on Jan. 26.

Other aerospace and defense companies prepping for potential exits include KP Aviation, an aftermarket aircraft parts supplier backed by Bain Capital Special Situations, as reported.

Sponsors active in the defense space include Veritas Capital, AE Industrial Partners and J.F. Lehman & Co.

Octus’ BDC Database shows TransDigm has a SOFR+250 bps first lien term loan maturing in March 2032. Antares Strategic Credit Fund, Apollo Debt Solutions BDC and Blue Owl Credit Income Corp. are listed as holders in the facility.

TransDigm also has a SOFR+225 bps first lien term loan maturing in March 2030, which was trading in the secondary at 99.85/100.11 as of press time, according to Solve.

Armtec declined to comment. TransDigm and Evercore did not respond to requests for comment.

TransDigm’s capital structure is shown below:

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